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Yields on money-market mutual funds continued to slide, amid signs that portfolio managers expect further declines in interest rates. 

The average seven-day compound yield of the 400 taxable funds tracked by IBC/Donoghue's Money Fund Report eased a fraction of a percentage point to 8.45% from 8.47% for the week ended Tuesday.
Compound yields assume reinvestment of dividends and that the current yield continues for a year. 

Average maturity of the funds' investments lengthened by a day to 41 days, the longest since early August, according to Donoghue's.
Longer maturities are thought to indicate declining interest rates because they permit portfolio managers to retain relatively higher rates for a longer period.
Shorter maturities are considered a sign of rising rates because portfolio managers can capture higher rates sooner. 

The average maturity for funds open only to institutions, considered by some to be a stronger indicator because those managers watch the market closely, reached a high point for the year -- 33 days. 

Nevertheless, said Brenda Malizia Negus, editor of Money Fund Report, yields "may blip up again before they blip down" because of recent rises in short-term interest rates.
The yield on six-month Treasury bills sold at Monday's auction, for example, rose to 8.04% from 7.90%. 

Despite recent declines in yields, investors continue to pour cash into money funds.
Assets of the 400 taxable funds grew by $1.5 billion during the latest week, to $352.7 billion. 

Typically, money-fund yields beat comparable short-term investments because portfolio managers can vary maturities and go after the highest rates.
The top money funds are currently yielding well over 9%.
Dreyfus World-Wide Dollar, the top-yielding fund, had a seven-day compound yield of 9.37% during the latest week, down from 9.45% a week earlier.
It invests heavily in dollar-denominated securities overseas and is currently waiving management fees, which boosts its yield.
The average seven-day simple yield of the 400 funds was 8.12%, down from 8.14%.
The 30-day simple yield fell to an average 8.19% from 8.22%; the 30-day compound yield slid to an average 8.53% from 8.56%. 

